Renewable Energy Act (EEG)


The Renewable Energy Act (EEG for short) regulates the priority supply of electricity from renewable sources into the power grid and guarantees producers a fixed feed-in tariff per kilowatt hour. This regulation was created back in 1991 with the Power Feed-In Act and replaced in 2000 by the first EEG, which has been continuously adjusted since then.
With the 2023 EEG amendment, the expansion targets and financing were extensively reformed.

What are the goals of the Renewable Energy Act?

The overall goal of the EEG is to accelerate the transformation to a sustainable and greenhouse gas-neutral power supply in the interest of climate and environmental protection. The expansion of renewable generation plants is promoted through a connection and acceptance obligation, as well as a fixed feed-in tariff per kilowatt hour produced. Since the introduction of the EEG, the share of renewables in electricity consumption has increased from less than 10% to around 45%.

The target for 2030 is 80%. In order to achieve this, the expansion targets for PV, offshore and onshore wind farms have been increased. In the years 2027-2030, approximately 15 GW of wind energy plants and 20 GW of photovoltaics are to be installed. In total, the installed capacity of wind and PV is to be tripled by over 350 GW by 2030.

How was and will the expansion of renewables be financed in the future?

To promote the expansion of renewable energy systems, they receive a guaranteed feed-in tariff per kilowatt hour from the network operator for 20 years. The difference between feed-in tariffs and income generated on the electricity exchange is reimbursed to the grid operators. To finance this compensation, the EEG surcharge per kilowatt hour of electricity consumption was charged to end users until 30.06.2022.

In this way, every electricity consumer should help finance the energy revolution in accordance with their electricity consumption — at least almost everyone. In particular, large consumers such as energy-intensive industries were exempted from the levy, which disproportionately burdened private households and commercial customers. With the increase in the EEG surcharge from 2.05 ct (2010) to 6.76 ct (2020), criticism of this type of financing also grew. The reason for the tripling of the levy is partly due to industrial privileges and the lower electricity price, which results from excess capacities that are not based on the electricity price, such as atomic and coal-fired power plants.

With the EEG Amendment 2023, the EEG surcharge was completely abolished and replaced by financing from the “Climate and Transformation Fund”. A total of around 177.5 will be between 2023 and 2026. €billion is provided for the fund, of which €35.5 billion is earmarked for EEG funding. The Climate and Transformation Fund is financed primarily from emissions trading and subsidies from the federal budget.

Are large battery storage systems supported by the EEG?

In addition to renewable generation plants, the innovation tender also promotes combinations of PV or wind systems with energy storage systems. These investment combinations receive a market premium in addition to the revenue from direct marketing.

However, the combination with large battery storage systems is only promoted if electricity is consumed exclusively from renewable sources. It is therefore prohibited to draw electricity from the grid. The fields of application of large battery storage systems within such innovation systems are therefore significantly limited. It is not possible to provide negative balancing power to stabilize the grid, nor is it possible to trade electricity in a market-oriented way to balance supply and demand.
These restrictions thus reduce the economic benefits of large battery storage systems and increase funding costs.
In the 04/2022 tenders, the tendered volume of 400 MW was only barely achieved or significantly undermet in the previous call for tenders 08/2021 with 156 MW of 250.